Referral Marketing: What It Is and How To Do It RIGHT!

Your customers love what you do. And they’ll refer their friends if you use the right tools and tactics. So check out the referral marketing crash course below see for yourself how to do referral marketing. Be sure to embed this slideshow or tweet out to other marketers you know.

What’s in the course?

Everything you need to know about generating customer referrals and optimizing your virality. Includes practical examples from real online businesses, including Friendbuy customers that are just like you!

I get tons of emails from marketers asking me… How can I run better referral campaigns? What kind of incentive should we use? Should we run a single-sided or double-sided incentive? How often should I refresh my campaign and offers?

These are ALL great questions!

But time and again I’ve noticed that marketers rarely focus on the one thing that will always help increase referrals…LOCATION, LOCATION, LOCATION!

1. Widget Location Increases Referral Program Participation

Here’s a typical conversation:

Marketer: “I want to give my customers the opportunity to share and refer friends after they make a purchase.”

Me: “That’s great! What’s your overall site conversation rate?”

Marketer: “Normal. Three to four percent on average.”

Me: “What are you doing about the other 97% of your site visitors?”

Making your program widely available to all visitors — in many locations, not just your checkout page — is hands down the best thing you can do to increase referral program participation. (The second best thing you can do is A/B testing, but that’s coming later. Yep, that’s a teaser…)

Those are just four ‘must have’ locations. I’ve also seen brilliant executions on blogs help desks outbound emails (transactional, newsletters, etc.) …essentially, any real estate you control.

By spreading out your widget locations, you will move the needle in a big way, increasing the visibility of your referral program — from just 3% on the post purchase page — to 100% of site visitors.

Oh, and one more key performance driver is Open Access Sharing. Friendbuy widgets do not force users to login before sharing with friends! Why? Because ‘forced login’ will drop user participation by 90% or more.

One question I get a lot is: “After setting up my widgets, what’s the first thing I should do that will have the greatest impact?”

That’s easy…

3. Promote Your Referral Page For Immediate Results

The widgets you’ve placed on your homepage, user account page and post-purchase page will take care of themselves with your regular site traffic.

However, you can get immediate results by promoting the link to your referral landing page.

4. Five ways to promote your referral landing page to get results now:

“Get $10 for Free,” won by a long shot, lifting the sharing rate to 48.7%, well above a ‘reasonable’ rate of 7%.
The irony, of course, is that all of these offers are the same. NatureBox subscriptions are $20 per month. Mathematically speaking, the referral reward is always $10.

A/B testing the headline made all the difference!

Next, an example of optimizing the shared content to increase referral visits.

Shared Content – this is the offer that friends will see. It compels them to click and visit your site.

Optimize referral visits by A/B testing this shared content.

Birchbox ran a simple A/B test during the holidays, modifying only the title (Facebook title line) of their shared content.

“Birchbox – The Perfect Holiday Gift,” doubled the number of users who clicked on the shared content AND doubled referral purchases. A double whammy!
All performance gains were achieved with just one copy change. Note that this test ran with no incentive, which is always an option for referral campaigns.

But wait! There’s more.

Here is a rundown of campaign metrics and elements to refine and test…

7. Additional Referral Campaign Elements You MUST Test

Referral Performance Metrics

As your referral program evolves and A/B testing is underway, focus on the following key metrics:

Sharing Rate – Percentage of people who share when presented with a widget

Everything we’ve covered can be implemented immediately and effectively with Friendbuy. If you’ve come this far, you should give yourself the power to truly knock your referral marketing out of the park. Sign up for a 30-day, no risk free trial. Click here to get started!

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